Review of the Adequacy of the Fund’s Precautionary Balances
August 25, 2010
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The paper reviews the adequacy of the Fund’s precautionary balances and proposes a more transparent and rules-based framework for adjusting the precautionary balance target through time. The framework seeks to provide sufficient flexibility to capture the main elements considered relevant by the Board in the past when setting the target and draws on approaches followed by other IFIs, adapted to the particular circumstances of the Fund.
Subject: Credit risk, Financial risk, Fund financial position, Fund reserves, General Resources Account, Precautionary Credit Line, Reserves accumulation, Risk management, Transparency
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Policy Papers
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